Newsletter June 2021

Contents: Blog post on ‘Build Back Better World’, the US-copy of BRI; European bailout for Montenegro; Call for boycott of Myanmar’s jade industry; Chinese Foreign Direct Investment in Europe in 2020; Chinas technological influence in Southeast Asia through the Digital Silk Road; Environmental Authoritarianism: Review of ‘China goes green’ by Yifei Li and Judith Shapiro.

Blog posts:

B3W: New Highway to Heaven. June 2021

The label for the multilateral copy of China’s New Silk Roads, recently announced at the G7 summit by U.S. President Biden, is gruesome: Build Back Better World, or B3W. But it is certainly not more gruesome than the official designations One Belt, One Road (OBOR) or Belt and Road Initiative (BRI) for the original. Most media outlets gleefully-affirmatively embraced the “positive vision”, the White House wants to open up for the countries of the Global South, as yet another sign that the “major democracies” are back on the world stage as a collective actor. As a “values-driven, high-standard, and transparent infrastructure partnership” it is to compete with China’s infrastructure activities, which are regarded as being indecent and harmful for the targeted countries. So far, however, B3W is merely an anaemic PR product – and it will probably remain that way for a long time. More

Deutsch: B3W: Seidenstraßen Made in USA. Juni 2021.

Global Voices: China’s Belt & Road Initiative: Deal or Steal? (Posted on Blogroll)

„As China expands and advances its interests as a global power, we explore its influence in other countries. While the Belt and Road Initiative plays out across all continents, local societies and communities hold differing perceptions of its benefits and potential harms, despite China’s extensive public relations and propaganda effort to promote its aims. Our investigation looks at the intersection of Chinese technology transfer, soft power, communications technology buildout, and public information. Working with local researchers and writers in a dozen countries, we explore the ways China advances narratives that bolster its drive for global power, and how local perspectives either support or counter China’s ambitions. Over the next few months, we’ll be adding stories and details about the project to this page.“ Global Voices Civic Media Observatory

News:

European bailout for Montenegro

At the last minute, the EU seems ready to bail out Montenegro (see blog post: My borrowers, your borrowers):  The indebted Balkan state, additionally burdened with the impact of Corona, had difficulties to start repayment for a Chinese € 809 million loan for an ambitious and controversial highway project due in July 2021. After an initial brusque rejection by the EU, much begging on the part of the Montenegrin government and the message from Beijing, expressing its willingness to discuss extending the grace period until the end of 2022, now several European financial institutions are ready to facilitate an alternative debt financing solution, changing a US$-based 2 per cent interest loan to China into a €-based 1 per cent loan with a six-year grace period and repayment of 20 years. Obviously, the bargaining position for countries like Montenegro improves with the competition between China and Europe. Yet, it is another question whether non-European countries, let’s say in Africa, may benefit equally.

Source: Merics EU-China Weekly Review, 23 June, 2021.

China urged to boycott Myanmar’s jade industry

Since the ouster of the democratically elected government in early February 2021, there have been – mostly lukewarm – attempts to build political and economic pressure on the military coup leaders. There have been some sanctions on military personnel by Western governments, some foreign companies withdrew from joint ventures with the military economic complex MEHL. Too, China as one of their most important business partners would have many options to cut them off from their commercial sinecures. (see blog post: Myanmar: Beijing in a fix). The US-American campaign group Global Witness calls for an international boycott of the jade industry to dry up financial flows to the military which is heavily involved in the business. Global Witness estimates that up to 90 per cent of Myanmar’s jade ist smuggled out of the country, almost all of it into China, where it is processed into jewellery and other saleable items. So China could play a key role in such a boycott.

Source: SCMP, June 29, 2021.

Readings:

Chinese Foreign Direct Investment in Europe: 2020 update

In 2020, Chinese direct investment in the European Union and the United Kingdom was significantly lower than in previous years. Expectations that the Covid 19 pandemic would trigger a surge in Chinese purchases have not materialised. Last year, the volume of completed Chinese M&A projects fell by 45 per cent compared to 2019, from €11.7 billion to €6.5 billion. New investments, so-called greenfield investments, on the other hand, reached their highest level since 2016, with a volume of 1.3 billion. Europe remains an attractive investment location, but the on-going disruptions caused by the pandemic, high hurdles for capital outflows from China and major regulatory obstacles in Europe continue to contribute to Chinese investments being at a lower level. Tense and deteriorating EU-China relations may create additional headwinds for Chinese investors in the future.

Source: Mercator Institute for China Studies, Berlin. Papers on China, June 16, 2021.

The Digital Silk Road in Southeast Asia

China has expanded its influence over Southeast Asia’s technological development through its Digital Silk Road (DSR) initiative, a newer part of the Belt and Road Initiative (BRI). A paper by Dai Mochinaga, a senior researcher at the Keio Research Institute in Japan,shows that China utilizes the DSR in Southeast Asia for several reasons. First, the DSR helps implement Beijing’s cyberspace principles and norms in other countries. Second, it promotes Chinese investment in certain industries in Southeast Asia, and helps convince other countries to use technology standards common to Chinese firms. Finally, Beijing exerts its influence over Southeast Asia, via the DSR, to help promote its models for data privacy and security on the internet. Despite efforts via the DSR and other avenues to exert influence over Southeast Asian cyberspace, China has not been fully successful in its aims in the region, in part due to local resistance, and in part because Japan, the United States and other actors have responded to Beijing’s efforts with their own proposals for cyberspace, conceived as part of the Free and Open Indo-Pacific strategy.

Source: Dai Mochinaga, The Digital Silk Road and China’s Technology Influence in Southeast Asia, Asia Unbound, June 2021.

China goes green

Could China be a green role model? The number of voices holding China up as a showcase for solving ecological crises, first and foremost the climate crisis, is growing. The reasons for this are the rapid expansion of wind and solar energy (with the downside of mega dams and nuclear power plants), the implementation of a comprehensive environmental management through institutions, laws and campaigns (albeit with sometimes drastic interventions into everyday life), and the astonishing change into a beacon of hope at the climate summit in Paris in 2015. Moreover, with the concept of ecological civilisation, Xi Jinping’s government has formulated nothing less than the claim to be a provider of ideas and a pioneer for dealing with the ‘common global threats’, even for a new era. At the same time, Beijing’s “coercive environmentalism” is water on the mills of all those who believe that state authoritarianism is better suited than democratic conditions to get to grips with the problems.

In order to „deconstruct and challenge the assertion, that China has gone green“, the two authors, Yifei Li, Assistant Professor of Environmental Studies at NYU Shanghai and Judith Shapiro, Chair of the Global Environmental Politics Program at American University in Washington D.C., analyse firstly the environmental governance within China, „which was changed dramatically“,  secondly the international implications as the country rises to become a world superpower and seeks to export a development model that is both green and state-led, and thirdly China’s role in global trade, biodiversity and Climate as a key actor in trying to find solutions.

An illustrative example for China’s state-led environmentalism is the Belt and Road Initiative (chapter 3), which is now also increasingly being presented as “green”. The familiar win-win-framing of this economic and political infrastructure and investment programme is complemented by a „green developmentalism“, the projection of ecologically friendly soft-power like training programmes in environmental management und policies, and the use of big data in governance. The authors identify digital development at the heart of what China sees as low-carbon, clean, green growth for the underdeveloped countries along the BRI. The quasi official acknowledgement of BRI by UN-Organisations like UN Environment and linking BRI and the UN’s Sustainable Development Goals lends China a powerful imprimatur of international legitimacy.

But the impression of a successful and sustainable ecological policy is misleading; striking progress in some areas is contrasted by countless failures and empty spaces. The opportunities for a green development, underlined, for instance, by the expansion of clean technologies, stand in a fundamental contradiction to „essentially capitalist China’s needs for domestic and global procurement of natural resources like minerals, fossil fuels, and grain, and the international transfer of environmental externalities“ (191). Chinese policy makers seem patently insensitive to the environmental and ecological impacts of infrastructure development and commerce, caused for instance by the export of coal-fired power plants or dam-building on the Mekong river. The construction of a Digital Silk Road (DSR) offers at the same time opportunities for censorship and surveillance.

As a result, environmental policies become a vehicle for the consolidation and centralization of state power, to strengthen the authority and reach of the state as the sole legitimate steward of the environment. „The Chinese state uses the appearance of going green to consolidate its power over territory and over the individual“ (188). Because the authors see authoritarianism as the end and environmentalism as the means, they conclude that Beijing’s strategy should be called „environmental authoritarianism“.

Yet there is some hope as well: Because of the state’s hyperbolic framings and unfulfilled pledges have become its largest political liability, there are structural opportunities for non-state social forces to hold the Chinese state to account (198). Chinese Belt and Road investors could be motivated to do a better job by cooperation between local civil society organisations in BRI countries and activists within China, who learn about some of the negative impacts of their country’s activities overseas.

The final chapter then reflects on the implications of the findings and whether the planet needs a „green autocracy“. While the authors agree, that radically new forms of governance are required, they dismiss the Chinese techno-political role model as inappropriate to provide the sustainable solutions which are necessary.  Ultimately, it appears that reopening and reviving consultative mechanisms are „key to the authoritarian state’s political effectiveness and legitimacy“ (205). Thus, this Sino-American analysis enriches not only the understanding of how China is going green. It also contributes to the debates in other countries about ways out of the crises: How much technological ‚fixes’, how much top-down governance, and how much democratic steering?

Yifei Li, Judith Shapiro, China Goes Green. Coercive Environmentalism for a Troubled Planet. 2020, Polity Press, Cambridge, UK

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